The Euro lost its recent bullish momentum and dropped below 1.13 despite a weaker than expected US inflation number. Market participants are in no mood to sell US Dollars despite the rising odds of Fed rate cuts. Moreover, ECB President Draghi warned of global trade deterioration if trade disputes won’t be resolved soon, which also weighed on the single currency bullish narrative. Looking ahead, Germany’s CPI and EU’s Industrial Production numbers will help traders to confirm if the common currency’s overall bullish sentiment is dented or was yesterday’s drop only a short-term pullback.
The Euro bulls faced a strong resistance at 1.1343 yesterday which made price fall and close below 1.13. The bias on the single currency will remain bullish as long as it is trading above the 50-day moving average (1.1280) and the 1.1260 support level. If the bears successfully break below these levels, then the bias will change and we will be looking for a possible 1.1220 retest.
Support: 1.1260 / 1.1220
Resistance: 1.13 / 1.1320 / 1.1350